Tax discussion thread (U.S. focused)

[Final-Fan]

THE DISCUSSION WITH KASZ216:  What has gone before: 

Final-Fan said:

Kasz216 said:

Final-Fan said:

Kasz216 said:

Final-Fan said:

Kasz216 said:

Final-Fan said:
So Kasz216, you favor a Flat Tax?

Not as of yet.  However I don't favor raising the tax percentages either.  Doing that to the people who actually do a large portion of investing and job creating seems like suicide with the financial situation as it is.

I think a flat tax in the end is probably fair.  Yet not feasable considering how the government currently runs, and that if we cut back on a lot of the useless crap the government does and focus some money on other needs like healthcare and other needs.

I mean.... once everyone is taken care of by their basic needs... what's unfair about a flat tax?

Once the basic needs are taken care of on all what's wrong with having a flat tax?

Two basic comments:

What constitutes "basic needs"?  Food and shelter?  Food, shelter, and clothing?  Food, shelter, clothing, and video games?  College?  Opinions are going to differ.

I would argue that taking 20% of $20,000 hurts a lot more than taking 20% of $200,000.  That's why I don't favor the flat tax at all.

As far as taxing investments, I'm willing to get into this if you want, but preferably we might create a devoted Flat Tax discussion thread if we're really going to go at it.  But one thing I recently heard of is that in the past there has sometimes (in dire times such as this IIRC) been a very small (0.1%) tax on stock trades.  This would certainly cut down on market volatility, which I believe has been named as the biggest [edit:  current stock] market hazard.

Anyone who considers videogames or college basic needs are basically unreasonable.
Basic needs = what you need to live a healthy life.
The constitution above all else gives us three things.
Life, Liberty and the Pursuit of Happiness.
Life = Basic Needs
Liberty = Not restricting people unneededly.
Pursuit of Happiness = Not getting in peoples way in what they want to do.

But what is needed for a "healthy life"?  Is it sheer survival or is there anything more that is required for a "healthy life"?

Anyway, have you no comment on the rest of it?  What do you think of the stock trade tax idea?

I've got nothing against taxing investments in a flat tax system.  Or rather the profits off said investments.  Just another part of "income" to me.

Any money made would be taxable if you ask me.  If I got to set it up you'd pay as much off of what you made off your stock margins as you did off of a paycheck.  At the time of sale though... otherwise you'd just constantly get hit everytime your stock price went up, and get no relief when it dropped.

As for argueing about taking 20% of 20,000 hurting more then 20% of 200,000.... isn't an arguement based on any numbers or anything so it's kinda hard to argue.  I could just as equally argue that 20% of 200,000 is more harmful because it's more money and the person could buy more stuff with said money.

20% is always 20% though.

I think you're misunderstanding the idea of a stock trade tax.  But I guess I could be misunderstanding the idea as it was told to me.  What I understand it to be is like a sales tax on stock.  You trade it, 0.1% of the money you get goes to Uncle Sam.  That's aside from capital gains tax and whatever. 

I guess I could probably go dig up studies if you want, but I thought it could be settled as an intellectual exercise.  If a man makes $10 million, I'm sure he could find a way to spend it all, but I seriously doubt he would be "harmed" by the government taking half ($5 million) of it away as much as a man who makes $50,000 would be "harmed" by the government taking half ($25,000) of it away.  I am confident this is true even if we take it as given that the cost of basic survival is not counted in those incomes.  I mean, unless you defined "harm" as "number of dollars they don't get", but I don't think that's a good definition. 

Anyway, Warren Buffet says he keeps a bigger percentage of his income currently than do his secretary and housekeeper, so I think we can afford to raise the top marginal rates even if you support a flat tax.

Kasz216 said:

Final-Fan said:

Kasz216 said:
Makes sense to me as for taxing the stocks.  Though i'd think you'd want to do it with buying not selling if you were going for the fairness angle.

As for the second arguement... by that line of reasoning it would suggest that the best tax method would be to tax the rich exclusivly.

Also to tax them on savings and not spending... since Warren Buffet is going to be less harmed by his taxes then Bill Gates since Warren Buffet doesn't have expensive tastes.

At what level do you consider the 200,000 person hurt as much as the 20,000 person?  When they have an equal amount of money?  If not... what level do you consider equal... and how do you reach said number?

(1) That might be the proposal, I don't know.  They'll probably just jack up the price by a computer program to make the buyer pay anyway. 

(2) I don't understand how you got there from my post.  I don't recall stating or suggesting any such thing, and I'm not in favor of it. 

(3) I don't think that taxing savings is a good idea by any means, except the estate tax which only takes it after you die and only if you have a ton of it. 

(4) I'm not sure.  Of course not, you're being silly on purpose (I hope).  I'm not sure exactly where it breaks, and anyway people lead different lives so you could never have it perfect.  IMO a progressive income tax is the best way to get as close as we reasonably can.  According to a calculator I found a person making $500k would owe about 30% of it overall in income tax, and I think it could stand to be higher by Obama's proposed rate (which prevailed in the 1990s). 

I also think that we could add a new top bracket at $1 million or something with a marginal rate of 50% without any of the doom and gloom that would inevitably be predicted, not that I think it's likely to happen. 

P.S.  Why is the capital gains tax lower than the income tax?

P.P.S.  Some time ago I made posts talking about, among other things, a study that compared the tax burden on top 1% of earners, top 5%, bottom 50%, etc. to their wealth.  I believe it used the older rate but I could be wrong.  Would you like me to dig that up?  We could start a side thread on this topic if you like, I keep being afraid of derailing this one's purpose.

Not at all. It's overexagerated but I think it's important to look a this scientifically. I've just got a lot of quesions. Another thread would be fine. These would be my general questions in it.

1) What is your definition of harm. With basic needs taken care of... is it ability to purchase luxuary items?

2) A direct ratio is needed for such an argument in my opinion. There has to be some relative rank. I mean ballpark it... perferably with some numbers an equation.

3) When basing it on a nebuleus definition as "hurt" instead of real numbers, your doing things based on feelings... not data. Don't you find this problematic?

4) You are using the argument that the rich pay less from there "wealth" then the poor do yet you are against taxing savings aka wealth. Isn't that contradictory? Wouldn't a straight flat tax on all wealth equal out your problem with everything? Shouldn't a system based on wealth as the measuring point actually tax wealth directly

5) When all basic needs are taken care of, will your % numbers hold out? When nobody has to pay for needs? If so. Isn't this likely do to conspicous consumption? Is it then considered a basic right to have a certain level of luxary as well?

6) The capitals gains tax is lower so people invest in the stock market more. It's really a stupid idea as i mentioned I think all taxes should be equal on income. (money coming in that's profit.) I think it's better to raise the capitals gains tax then raise the income tax.

7) Why should two people making 125K a year who live together pay less taxes then two people living together where one person makes 250K a year and the other makes nothing? Two people making 10K pay less then one person making 20K etc.

Here is the biggie.

8) Don't you think a progressive tax gives the government a big incentive to make the rich richer and the middle class poorer since the more rich the rich are the more taxes the government gets? Instead of a 20% all around... the government gets 23% if the rich get richer, and 17% if the middle class is buffed up?